Are inclusionary housing programs color-blind? The case of Montgomery County MPDU program

Diagne, Adji Fatou; Kurban, Haydar; Schmutz, Benoît

doi:10.1016/j.jhe.2018.02.003

Cited by 5 publications

(1 citation statement)

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“…Although it may boost the supply of affordable housing (Dawkins et al , 2017; Gurran et al , 2007; Monk et al , 2005; Mukhija et al , 2015; O’Neill et al , 2008), it may also imply additional costs because of price-controlled housing (Schuetz et al , 2011), constraints on supply, and developers cross-subsidizing the affordable units by attempting to raise the prices of market-rate units and recoup revenue shortfalls (Bento et al , 2009; Bento et al , 2014; Clapp, 1981; Powell and Stringham, 2004; Tombari, 2005). IZ may also result in density and stigma effects that decrease demand for market-rate units, counteracting its purpose of producing the affordable units in desegregated, non-stigmatized and geographically compact areas (Diagne et al , 2018; Hughen and Read, 2014; Kontokosta, 2014, 2015). Evidence on voluntary IZ programmes is relatively scarce, but it is argued that even if they do not deliver more affordable housing, they likely do not have adverse effects on the supply of market-rate houses (Fernandez et al , 2019; Mukhija et al , 2010).…”

Section: Introductionmentioning

confidence: 99%

Staged implementation of inclusionary zoning as a mechanism to improve housing affordability in Auckland, New Zealand

Fernández

Martin

2020

IJHMA

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Purpose The purpose of this paper is to analyse how the staged implementation of inclusionary zoning (IZ) performs relative to conventional IZ programmes in terms of increasing the number of low- and moderate-income households become homeowners. Design/methodology/approach The paper applies a matching model implemented through a mixed-integer programme model taking Auckland (New Zealand) housing market as a case study. The IZ is simulated by two features: a target price (below which affordable houses are defined) and the income threshold (below which any household gains access to the programme). The staging of IZ consists of first directing affordable houses to low-income households, where those houses that are not sold are cascaded to subsequent population groups with higher incomes. Findings The staged implementation of IZ does not necessarily imply that the number of sales will increase both for affordable and market-rate houses. However, a hybrid approach defined by two target prices results in a greater number of sales relative to a conventional IZ and a baseline affordable market while achieving market efficiency and equity. Research limitations/implications The paper is limited to the marginal impact of new affordable houses entering the market. It does not address further market rounds for houses left empty for tractability purposes. Also, the analysis is circumscribed to current renters and not owners, if owners were included they would outbid renters and distort the intended impact of IZ as an affordable housing policy. Originality/value The paper has relevance for policymakers because it provides evidence about the dimensions of IZ to have a lasting effect on housing affordability. The model is applied to a single housing market but is suitable to be generalized and adapted to a different urban environment.

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